CHAPTER 6. INDIANA COMMODITY CODE
IC 23-2-6
Chapter 6. Indiana Commodity Code
IC 23-2-6-1
"Board of trade" defined
Sec. 1. As used in this chapter, "board of trade" refers to a person
or group of persons engaged in:
(1) buying or selling a commodity; or
(2) receiving a commodity for sale on consignment;
whether the person or group of persons is characterized as a board of
trade, an exchange, or any other type of marketplace.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-2
"Commissioner" defined
Sec. 2. As used in this chapter, "commissioner" refers to the
securities commissioner appointed under IC 23-19-6-1(a).
As added by P.L.177-1991, SEC.10. Amended by P.L.27-2007,
SEC.20.
IC 23-2-6-3
"CFTC Rule" defined
Sec. 3. As used in this chapter, "CFTC Rule" means a rule,
regulation, or order of the Commodity Futures Trading Commission
that is in effect on July 1, 1991, and any subsequent amendment,
addition, or revision to the rule, regulation, or order unless the
commissioner disallows the application to this chapter of the
amendment, addition, or revision not later than ten (10) days after the
effective date of the amendment, addition, or revision.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-4
"Commodity" defined
Sec. 4. As used in this chapter, "commodity" means, except as
otherwise specified by a rule, regulation, or order of the
commissioner, any of the following:
(1) An agricultural, a grain, or a livestock product or byproduct.
(2) A metal or mineral, including a precious metal.
(3) A gem or gemstone, whether the gem or gemstone is
characterized as precious, semiprecious, or another
characterization.
(4) A fuel (whether liquid, gaseous, or otherwise).
(5) Foreign currency.
(6) All other goods, articles, products, or items of any kind,
except the following:
(A) A numismatic coin whose fair market value is at least
fifteen percent (15%) higher than the fair market value of the
metal contained in the coin.
(B) Real property.
(C) Any timber, agricultural, or livestock product that is
grown or raised on real property and that is offered or sold
by the owner or lessee of the real property.
(D) A work of art that is offered or sold by art dealers,
offered or sold at a public auction, or offered or sold through
a private sale by the owner of the work of art.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-5
"Commodity broker-dealer" defined
Sec. 5. As used in this chapter, "commodity broker-dealer" means
a person engaged in the business of executing transactions in
commodity contracts or commodity options for:
(A) the account of others; or
(B) the person's own account.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-6
"Commodity contract" defined
Sec. 6. As used in this chapter, "commodity contract" means an
account, an agreement, or a contract that:
(1) is for the purchase or sale of at least one (1) commodity;
(2) is primarily for speculation or investment purposes; and
(3) is not primarily for the use or consumption by the offeree or
purchaser;
regardless of whether the account, agreement, or contract is for
immediate or subsequent delivery or whether delivery is intended by
the parties, and whether characterized as a cash contract, deferred
shipment or deferred delivery contract, forward contract, futures
contract, installment or margin contract, leverage contract, or
otherwise. For purposes of this chapter, any commodity contract
offered or sold shall, in the absence of evidence to the contrary, be
presumed to be offered or sold for speculation or investment
purposes. The term does not include a contract or agreement that
requires, and under which the purchaser receives, physical delivery
of the total amount of each commodity to be purchased under the
contract or agreement not later than twenty-eight (28) calendar days
after payment in good funds of any portion of the purchase price.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-7
"Commodity Exchange Act" defined
Sec. 7. As used in this chapter, "Commodity Exchange Act"
means the act of the United States Congress known as the
Commodity Exchange Act (7 U.S.C. 1 et seq., as in effect June 30,
1991), and including all subsequent amendments, additions, or
revisions to the act unless the commissioner by rule or order
disallows the application of the amendments, additions, or revisions
to this chapter or to any provision of this chapter not later than ten
(10) days after the effective date of the amendment, addition, or
revision.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-8
"Commodity Futures Trading Commission" defined
Sec. 8. As used in this chapter, "Commodity Futures Trading
Commission" means the independent regulatory agency established
to administer the Commodity Exchange Act.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-9
"Commodity merchant" defined
Sec. 9. As used in this chapter, "commodity merchant" means any
of the following (as defined or described in the Commodity
Exchange Act or in a CFTC rule):
(1) A futures commission merchant.
(2) A commodity pool operator.
(3) A commodity trading advisor.
(4) An introducing broker.
(5) A leverage transaction merchant.
(6) A person associated with a person described in subdivisions
(1) through (5).
(7) A floor broker.
(8) Any other person, other than a futures association, that is
required to register with the Commodity Futures Trading
Commission.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-10
"Commodity option" defined
Sec. 10. As used in this chapter, "commodity option" means an
account, an agreement, or a contract giving a party to the account,
agreement, or contract the right but not the obligation to purchase or
sell:
(1) at least one (1) commodity; or
(2) at least one (1) commodity contract;
whether characterized as an option, privilege, indemnity, bid, offer,
put, call, advance guaranty, decline guaranty, or otherwise. However,
the term does not include an option traded on a national securities
exchange that is registered with the Securities and Exchange
Commission.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-11
"Commodity sales representative" defined
Sec. 11. As used in this chapter, "commodity sales representative"
means a person who:
(1) is acting for a commodity broker-dealer in executing or
attempting to execute a transaction in a commodity contract or
a commodity option; and
(2) is authorized to take those actions by the commodity
broker-dealer.
As added by P.L.177-1991, SEC.10. Amended by P.L.1-1992,
SEC.115.
IC 23-2-6-12
"Financial institution" defined
Sec. 12. As used in this chapter, "financial institution" means a
bank, savings institution, or trust company that is organized or
supervised under the laws of the United States or of any state.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-13
"Offer" defined
Sec. 13. As used in this chapter, "offer" means an offer to sell,
offer to purchase, or offer to enter into a commodity contract or
commodity option.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-14
"Person" defined
Sec. 14. (a) As used in this chapter, "person" means an individual,
a corporation, a partnership, a limited liability company, an
association, a joint-stock company, a trust where the interests of the
beneficiaries are evidenced by a security, an unincorporated
organization, a government, or a political subdivision of a
government.
(b) The term does not include a contract market designated by any
of the following:
(1) The Commodity Futures Trading Commission.
(2) Any clearinghouse of the Commodity Futures Trading
Commission.
(3) A national securities exchange that is registered with the
Securities and Exchange Commission.
(4) An employee, an officer, or a director of a contract market
designated clearinghouse or exchange who is acting solely in
that capacity.
As added by P.L.177-1991, SEC.10. Amended by P.L.8-1993,
SEC.315.
IC 23-2-6-15
"Precious metal" defined
Sec. 15. As used in this chapter, "precious metal" means the
following in coin, bullion, or other form:
(1) Silver.
(2) Gold.
(3) Platinum.
(4) Palladium.
(5) Copper.
(6) Any other items specified by a rule, a regulation, or an order
of the commissioner.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-16
"Sale" defined
Sec. 16. As used in this chapter, "sale" means any:
(1) exchange;
(2) contract of sale;
(3) contract to sell; or
(4) disposition;
for value.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-17
Limitations; commodity contracts or options
Sec. 17. Except as provided in sections 18 and 19 of this chapter,
a person may not:
(1) sell, purchase, or offer to sell or purchase a commodity
under any commodity contract or under any commodity option;
or
(2) offer to enter into as seller or purchaser any commodity
contract or any commodity option.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-18
Persons permitted to offer transactions under IC 23-2-6-17
Sec. 18. (a) The prohibitions set forth in section 17 of this chapter
do not apply to any transaction offered by any of the following
persons (or any employee, officer, or director of the person who is
acting solely in that capacity) if the person is the purchaser or seller
in the transaction:
(1) A person:
(A) who is registered with the Commodity Futures Trading
Commission as a futures commission merchant, a leverage
transaction merchant, an introducing broker, or an associated
person of an introducing broker; and
(B) whose activities require that registration.
(2) A person registered with the Securities and Exchange
Commission as a broker-dealer whose activities require that
registration.
(3) A person:
(A) who is affiliated with; and
(B) whose obligations and liabilities under the transaction
are guaranteed by;
a person described in subdivision (1) or (2).
(4) A person who is a member of a contract market designated
by the Commodity Futures Trading Commission or any
clearinghouse of the Commodity Futures Trading Commission.
(5) A financial institution.
(6) A person registered in Indiana as a securities broker-dealer
whose activities require that registration.
(b) The exemption provided by subsection (a) does not apply to
any transaction or activity that is prohibited by the Commodity
Exchange Act or by a CFTC rule.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-19
Contracts or transactions permitted under IC 23-2-6-17
Sec. 19. (a) The prohibitions set forth in section 17 of this chapter
do not apply to any of the following:
(1) An account, an agreement, or a transaction that is within the
exclusive jurisdiction of the Commodity Futures Trading
Commission as provided under the Commodity Exchange Act.
(2) A commodity contract:
(A) that is for the purchase of at least one (1) precious metal;
(B) that requires physical delivery of the quantity of the
precious metals purchased not later than twenty-eight (28)
calendar days after payment of any portion of the purchase
price; and
(C) under which the purchaser receives physical delivery of
the quantity of precious metals purchased not later than
twenty-eight (28) calendar days after payment of any portion
of the purchase price.
(3) A commodity contract solely between persons engaged in
producing, processing, using commercially, or handling as
merchants:
(A) each commodity subject to the contract; or
(B) any byproduct of the commodity subject to the contract.
(4) A commodity contract under which the offeree or the
purchaser is any of the following:
(A) A person described in section 18(a) of this chapter.
(B) An insurance company.
(C) An investment company (as defined in the Investment
Company Act of 1940).
(b) For purposes of this section, physical delivery is considered to
have occurred if both of the following occur:
(1) The quantity of precious metals purchased is delivered (in
specifically segregated or fungible bulk form) within the
twenty-eight (28) day period to the possession of a depository
that:
(A) is not the seller; and
(B) is any of the following:
(i) A depository that issues warehouse receipts that are
recognized for delivery purposes for any commodity on a
contract market designated by the Commodity Futures
Trading Commission.
(ii) A storage facility that is licensed or regulated by the
United States or any agency of the United States.
(iii) A depository designated by the commissioner.
(2) The depository, any other person described in subdivision
(1)(B), or a qualified seller issues and the purchaser receives a
certificate, document of title, confirmation, or other instrument
that evidences that the quantity of precious metals:
(A) has been delivered to the depository; and
(B) is held and will continue to be held:
(i) by the depository on the purchaser's behalf; and
(ii) free and clear of all liens and encumbrances, other than
liens of the purchaser, tax liens, liens agreed to by the
purchaser, or liens of the depository for fees and expenses
that have previously been disclosed to the purchaser.
(c) For the purposes of this section, a qualified seller is a person
who meets the following conditions:
(1) Is a seller of precious metals.
(2) Has:
(A) a tangible net worth of at least five million dollars
($5,000,000); or
(B) has an affiliate who:
(i) has unconditionally guaranteed the obligations and
liabilities of the person; and
(ii) has a tangible net worth of at least five million dollars
($5,000,000).
(3) Has stored precious metals with at least one (1) depository
on behalf of customers for at least the preceding three (3) years.
(4) Before any offer, and annually after any offer, files with the
commissioner a sworn notice of intent to act as a qualified
seller under this section that contains the following:
(A) The person's name and address.
(B) The names of the person's directors, officers, controlling
shareholders, partners, principals, and other controlling
persons.
(C) The address of the person's principal place of business.
(D) The state and date of the person's incorporation or
organization.
(E) The name and address of the person's registered agent in
Indiana.
(F) A statement that:
(i) the person; or
(ii) an affiliate of the person who has guaranteed the
obligations and liabilities of the person;
has a tangible net worth of at least five million dollars
($5,000,000).
(G) Depository information required by the commissioner,
including the following:
(i) The name and address of any depository that the person
intends to use.
(ii) The name and address of each depository in which the
person has stored precious metals on behalf of customers
at any time during the preceding three (3) years.
(iii) Independent verification from each depository named
in item (ii) that the person has in fact stored precious
metals on behalf of the person's customers in the
depository during the preceding three (3) years and a
statement by each depository showing the total deposits
made by the person during the three (3) years.
(H) A financial statement, audited by an independent
certified public accountant, for:
(i) the person; or
(ii) an affiliate of the person who has guaranteed the
obligations and liabilities of the person;
for the past three (3) years.
(I) The certified public accountant's audit report of the
financial statement described in clause (H).
(J) A statement describing the details of any civil, criminal,
or administrative proceedings currently pending or adversely
resolved against the person or the person's directors, officers,
controlling shareholders, partners, principals, or other
controlling persons during the preceding ten (10) years,
including the following:
(i) Civil litigation and administrative proceedings
involving securities or commodities violations or fraud.
(ii) Criminal proceedings.
(iii) Denials, suspensions, or revocations of securities or
commodities licenses or registrations.
(iv) Suspensions or expulsions from membership in or
associations with a self-regulatory organization registered
under the Securities Exchange Act of 1934 or the
Commodities Exchange Act.
(K) A statement declaring that proceedings described in
clause (J) have not occurred if there have been no
proceedings of that type.
(5) Notifies the commissioner of any material changes in the
information provided in the notice of intent under subdivision
(4) not later than fifteen (15) days after the changes occur or are
made.
(6) Annually furnishes to:
(A) each purchaser for whom the seller is currently storing
precious metals; and
(B) the commissioner;
a report by an independent certified public accountant of the
accountant's examination of the seller's precious metals storage
program.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-20
Waiver of requirements; qualified sellers; limitation on authority
to engage in business
Sec. 20. (a) The commissioner may unconditionally or
conditionally waive any of the requirements under section 19(c) of
this chapter that a person must otherwise satisfy to be considered a
qualified seller.
(b) The commissioner may by order deny, suspend, revoke, or
limit a person's authority to engage in business as a qualified seller
under section 19 of this chapter if the commissioner determines that:
(1) the order is in the public interest; and
(2) the person, the person's officers, directors, partners, agents,
servants, or employees, any person occupying a similar status
or performing similar functions, any person who directly or
indirectly controls or is controlled by the person or other person
listed in this subdivision, or the person's affiliates or
subsidiaries meet any of the following conditions:
(A) Has filed a notice of intention under section 19(c) of this
chapter that:
(i) is incomplete in any material respect; or
(ii) contains a statement that, under the circumstances in
which the statement was made, is false or misleading with
respect to a material fact.
(B) Has during the preceding ten (10) years:
(i) pled guilty or nolo contendere to a crime; or
(ii) been convicted of a crime;
indicating a lack of fitness to engage in the investment
commodity business.
(C) Has been permanently enjoined or temporarily enjoined
by a court from engaging in or continuing any conduct or
practice that indicates a lack of fitness to engage in the
investment commodities business.
(D) Is the subject of an order of the commissioner denying,
suspending, or revoking the person's license as:
(i) a securities broker-dealer;
(ii) a sales representative; or
(iii) an investment adviser.
(E) Is the subject of any of the following orders that are in
effect and that were issued during the preceding five (5)
years.
(i) An order by the commissioner, by a securities agency
or the securities administrator of any other state, Canadian
province, or territory, by the Securities and Exchange
Commission, or by the Commodity Futures Trading
Commission, that was entered after notice and opportunity
for hearing and that denied, suspended, or revoked the
person's registration as a futures commission merchant,
commodity trading adviser, commodity pool operator,
securities broker-dealer, sales representative, investment
adviser, or any substantially similar occupation.
(ii) An order suspending or expelling the person from
membership in or association with a self-regulatory
organization registered under the Securities Exchange Act
of 1934 or the Commodity Exchange Act.
(iii) A United States postal service fraud order.
(iv) A cease and desist order entered after notice and
opportunity for hearing by a person described in item (i).
(v) An order entered by the Commodity Futures Trading
Commission denying, suspending, or revoking registration
under the Commodity Exchange Act.
(F) Has engaged in an unethical or dishonest act or practice
in the investment commodities or securities business.
(G) Has failed to reasonably supervise sales representatives
or employees.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-21
Summary denial or suspension of exemption; qualified sellers
Sec. 21. (a) To protect the public interest or to protect investors,
the commissioner may by order summarily deny or suspend an
exemption provided under section 19 of this chapter for a qualified
seller. Upon the entry of an order denying or suspending an
exemption for a qualified seller, the commissioner shall promptly
notify the person claiming the exemption:
(1) that an order has been entered;
(2) of the reasons for the entry of the order; and
(3) that a date for a hearing concerning the order will be
determined not later than thirty (30) days after the
commissioner receives a written request for a hearing.
(b) The provisions of sections 39 and 40 of this chapter apply to
all subsequent proceedings after the entry of an order under this
section.
(c) The commissioner may by order deny or revoke an exemption
provided under section 19 of this chapter for a qualified seller if the
commissioner finds that an applicant or qualified seller:
(1) is no longer in existence;
(2) has ceased to do business;
(3) is subject to:
(A) an adjudication of mental incompetence; or
(B) the control of a committee, conservator, or guardian; or
(4) cannot be located after reasonable search.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-22
Rules; orders
Sec. 22. The commissioner may adopt rules and issue orders to do
the following:
(1) Prescribe terms and conditions of all transactions and
contracts that:
(A) are covered by this chapter; and
(B) are not within the exclusive jurisdiction of the
Commodity Futures Trading Commission, as granted by the
Commodity Exchange Act.
(2) Exempt persons from this chapter.
(3) Implement the provisions of this chapter for the protection
of purchasers and sellers of commodities.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-23
Registration of commodity merchants; places for trading
commodities or options
Sec. 23. (a) A person may not engage in the commodities trade or
business or otherwise act as a commodity merchant unless the
person:
(1) is registered or temporarily licensed with the Commodity
Futures Trading Commission for each activity causing the
person to be considered a commodity merchant and the
registration or temporary license has not expired or been
revoked or suspended; or
(2) is exempt from registration with the Commodity Futures
Trading Commission under:
(A) the Commodity Exchange Act; or
(B) a CFTC rule.
(b) A board of trade may not trade or provide a place for the
trading of any commodity contract or commodity option if the
commodity contract or commodity option must be traded on a
contract market or commodity market designated by the Commodity
Futures Trading Commission or is subject to the rules of a contract
market or commodity market designated by the Commodity Futures
Trading Commission, unless:
(1) the board of trade has been designated for the commodity
contract or commodity option by the Commodity Futures
Trading Commission; and
(2) the designation has not been vacated, suspended, or revoked.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-24
Fraud
Sec. 24. A person may not directly or indirectly:
(1) cheat or defraud or attempt to cheat or defraud any person;
(2) employ any device, scheme, or artifice to defraud any
person;
(3) make a false report, enter a false record, or make an untrue
statement of a material fact;
(4) fail to state a material fact that is necessary to make a report,
record, or statement made, under the circumstances in which the
report, record, or statement was made, not misleading;
(5) engage in a transaction, act, practice, or course of business,
including any form of advertising or solicitation, that operates
or would operate as a fraud or deceit upon any person; or
(6) misappropriate or convert the funds, security, or property of
any person;
in connection with the purchase or sale of, the offer to sell, the offer
to purchase, the offer to enter into, or the entry into of, any
commodity contract or commodity option subject to section 18,
19(a)(2), or 19(a)(4) of this chapter.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-25
Liability; violation of chapter
Sec. 25. (a) The act, omission, or failure of any official, agent, or
other person acting for an individual, an association, a partnership,
a limited liability company, a corporation, or a trust within the scope
of the official's, agent's, or person's employment or office constitutes
the act, omission, or failure of both:
(1) the individual, association, partnership, limited liability
company, corporation, or trust; and
(2) the official, agent, or person.
(b) Except as provided in subsection (c), the following are jointly
and severally liable for the violation of this chapter by a person and
are liable to the same extent as the person:
(1) Each person who directly or indirectly controls the person
who committed the violation.
(2) Each partner, officer, and director of the person who
committed the violation.
(3) Each person occupying a similar status or performing a
similar function as a partner, officer, or director described in
subdivision (2).
(4) Each person who:
(A) is an employee of the person who committed the
violation; and
(B) materially aids in the violation.
(c) A person is not liable under subsection (b) if the person proves
that the person:
(1) did not know; and
(2) in exercise of reasonable care could not have known;
of the existence of the facts on which the liability is alleged to exist.
As added by P.L.177-1991, SEC.10. Amended by P.L.8-1993,
SEC.316.
IC 23-2-6-26
Effect of chapter on securities law
Sec. 26. This chapter does not impair, derogate, or otherwise
affect any of the following:
(1) The authority or powers of the commissioner under the
Indiana securities law.
(2) The application of any provision of the Indiana securities
law to any person or transaction subject to the Indiana securities
law.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-27
Construction and implementation of chapter
Sec. 27. (a) This chapter shall be construed and implemented to
carry out the chapter's general purpose to do the following:
(1) Protect investors.
(2) Prevent and prosecute illegal and fraudulent schemes
involving commodity contracts.
(3) Maximize coordination with federal law and the law of
other states and the administration and enforcement of those
laws.
(b) This chapter does not create any rights or remedies upon
which actions may be brought by private persons against persons
who violate this chapter.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-28
Investigations; examinations; hearings; civil penalties
Sec. 28. (a) The commissioner may make investigations in or
outside Indiana that the commissioner finds necessary or appropriate
to:
(1) determine whether any person has violated or is about to
violate this chapter or any rule or order of the commissioner; or
(2) aid in the enforcement of this chapter.
(b) The commissioner may charge as costs of an investigation or
examination all reasonable expenses, including a per diem prorated
on the salary of the commissioner or an employee. All reasonable
expenses of investigation, examination, or hearing shall be paid by
the party under investigation or examination.
(c) The commissioner may publish information concerning any
violation of this chapter or any rule or order of the commissioner.
The commissioner shall upon request make available for inspection
and copying under IC 5-14-3 information concerning any violation
of this chapter or any rule or order of the commissioner.
(d) For purposes of an investigation or a proceeding under this
chapter, the commissioner or an officer or employee designated by
rule or order may do any of the following:
(1) Administer oaths and affirmations.
(2) Subpoena witnesses and compel the attendance of witnesses.
(3) Take evidence.
(4) Require the production of books, papers, correspondence,
memoranda, agreements, or other documents or records that the
commissioner finds to be relevant or material to the
investigation or proceeding.
(e) If a person does not give testimony or produce the documents
required by the commissioner or the commissioner's designee under
an administrative subpoena, the commissioner or the designee may
petition for a court order compelling compliance with the subpoena
or the giving of the required testimony.
(f) A petition for an order of compliance under subsection (e) may
be filed in any of the following:
(1) The circuit or superior court of a county containing a
consolidated city.
(2) The circuit or superior court where service may be obtained
on the person refusing to comply with the subpoena if the
person is within Indiana.
(3) The appropriate court of the state having jurisdiction over
the person refusing to comply with the subpoena if the person
is outside Indiana.
(g) Costs of investigations, examinations, and hearings and civil
penalties recovered under this chapter shall be deposited in the
securities division enforcement account established under
IC 23-19-6-1(f). With the approval of the budget agency, the funds
in the securities division enforcement account may be used to
augment and supplement the funds appropriated for the
administration of this chapter.
As added by P.L.177-1991, SEC.10. Amended by P.L.27-2007,
SEC.21.
IC 23-2-6-29
Cease and desist orders; civil remedies
Sec. 29. (a) If the commissioner believes, whether or not based
upon an investigation conducted under section 28 of this chapter, that
a person has engaged or is about to engage in any act or practice that
violates this chapter or any rule or order adopted or issued by the
commissioner, the commissioner may do any of the following:
(1) Issue a cease and desist order.
(2) Issue an order imposing a civil penalty of not more than ten
thousand dollars ($10,000) for any single violation.
(3) Initiate any of the actions specified in subsection (b).
(b) In addition to any other legal or equitable remedies, the
commissioner may bring any of the following actions in circuit or
superior court or in the appropriate courts of another state:
(1) An action for declaratory judgment.
(2) An action for a prohibitory injunction or mandatory
injunction to:
(A) enjoin any violation; and
(B) ensure compliance with this chapter or any rule or order
adopted or issued by the commissioner.
(3) An action for disgorgement.
(4) An action for the appointment of a receiver or conservator
for the defendant or the defendant's assets.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-30
Violations; special remedies
Sec. 30. (a) Upon a showing by the commissioner that a person
has violated or is about to violate this chapter or any rule or order
adopted or issued by the commissioner, a court may grant
appropriate legal or equitable remedies.
(b) Upon a showing by the commissioner of a violation of this
chapter or a rule or order adopted or issued by the commissioner, the
court, in addition to traditional legal and equitable remedies,
including temporary restraining orders, permanent or temporary
prohibitory or mandatory injunctions, and writs of prohibition or
mandamus, may order the following special remedies:
(1) A civil penalty of not more than ten thousand dollars
($10,000) for any single violation.
(2) Disgorgement.
(3) Declaratory judgment.
(4) Restitution to investors that request restitution.
(5) Appointment of a receiver or conservator for the defendant
or the defendant's assets.
(c) If the commissioner shows only that a person is about to
violate this chapter or a rule or order issued or adopted by the
commissioner, appropriate remedies under this chapter are limited to
the following:
(1) A temporary restraining order.
(2) A temporary injunction or permanent injunction.
(3) A writ of prohibition or writ of mandamus.
(4) An order appointing a receiver or conservator for the
defendant or the defendant's assets.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-31
Commodity codes of other states; violations; remedies
Sec. 31. (a) Upon a showing by the commissioner or by a
securities or commodity agency of another state that a person, other
than a government or a governmental agency, has violated or is about
to violate the commodity code of that state or any rule or order of the
securities commissioner or the securities agency or commodity
agency of that state, the court may grant appropriate legal and
equitable remedies.
(b) Upon a showing of a violation of the securities or commodity
act of another foreign state or a rule or an order of the securities
commissioner or securities agency or commodity agency of that
state, a court, in addition to traditional legal or equitable remedies,
including temporary restraining orders, permanent or temporary
prohibitory or mandatory injunctions, and writs of prohibition or
mandamus, may order the following special remedies:
(1) Disgorgement.
(2) Appointment of a receiver, a conservator, or an ancillary
receiver or conservator for the defendant or for the defendant's
assets located in Indiana.
(c) If the commissioner shows only that a person is about to
violate the securities act or commodities act of another state or a rule
or order issued or adopted by the administrator of the securities act
or commodities act of another state, appropriate remedies under this
chapter are limited to the following:
(1) A temporary restraining order.
(2) A temporary injunction or permanent injunction.
(3) A writ of prohibition or writ of mandamus.
(4) An order appointing a receiver, a conservator, or an
ancillary receiver or conservator for the defendant or for the
defendant's assets located in Indiana.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-32
Bonds; official actions
Sec. 32. A court may not require the commissioner to post a bond
in any official action under this chapter.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-33
Penalties
Sec. 33. (a) A person who knowingly violates:
(1) this chapter; or
(2) any rule or order issued or adopted by the commissioner
under this chapter;
commits a Class C felony.
(b) A person who violates a rule or an order issued or adopted
under this chapter may be assessed a civil penalty of up to ten
thousand dollars ($10,000).
(c) The commissioner may refer any evidence concerning
violations of this chapter or violations of any rule or order issued or
adopted by the commissioner to any prosecuting attorney in Indiana.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-34
Administration of chapter
Sec. 34. (a) The securities division of the office of the secretary
of state shall administer this chapter.
(b) The commissioner and any employees of the commissioner
may not do the following:
(1) Use for personal gain or benefit any information that:
(A) is filed with the commissioner or obtained by the
commissioner; and
(B) is not public information.
(2) Conduct securities dealings or commodity dealings based on
public or confidential information that is filed with the
commissioner or obtained by the commissioner if there has not
been a sufficient time for the securities markets or commodity
markets to assimilate the information.
(c) Except as provided in subsection (d), all information that is
collected, assembled, or maintained by the commissioner:
(1) is public information; and
(2) is available for inspection by the public.
(d) The following information is not public information and may
not be made available by the commissioner for public inspection:
(1) Information obtained in private investigations under section
28(a) or 28(d) of this chapter.
(2) Information that:
(A) is obtained from a federal agency; and
(B) may not be disclosed under federal law.
(e) The commissioner shall have the discretion to disclose any
information that is confidential under subsection (d)(1) to a person
described in section 35(a) of this chapter.
(f) This chapter does not create or derogate any privilege that
exists at common law, by statute, or otherwise, when any
documentary evidence or other evidence is sought under subpoena
directed to the commissioner or any employee of the commissioner.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-35
Cooperation with other authorities
Sec. 35. (a) In order to encourage uniform application and
interpretation of this chapter and in order to encourage securities
regulation and enforcement, the commissioner and the
commissioner's employees may cooperate with any of the following:
(1) A securities or commodities agency or the securities
commissioner of any other jurisdiction, including any foreign
jurisdiction.
(2) An agency administering any laws similar to this chapter.
(3) The Commodity Futures Trading Commission.
(4) The Securities and Exchange Commission.
(5) A self-regulatory organization established under the
Commodity Exchange Act or the Securities Exchange Act of
1934.
(6) A national or international organization of commodities or
securities officials or agencies.
(7) A governmental law enforcement agency.
(b) The cooperation authorized by subsection (a) may include the
following if the information sought would be subject to lawful
subpoena for conduct occurring in Indiana:
(1) Bearing the expense of any type of cooperation described in
this subsection.
(2) Making joint examinations or investigations.
(3) Holding joint administrative hearings.
(4) Filing and prosecuting joint litigation.
(5) Sharing and exchanging personnel.
(6) Sharing and exchanging information and documents.
(7) Writing and adopting mutual regulations, statements of
policy, guidelines, proposed statutory changes, and releases.
(8) Issuing and enforcing subpoenas at the request of any of the
following:
(A) An agency in another jurisdiction that administers a law
similar to this chapter.
(B) A securities or commodities agency of another
jurisdiction.
(C) The Commodity Futures Trading Commission.
(D) The Securities and Exchange Commission.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-36
Rules; forms; orders
Sec. 36. (a) In addition to specific authority granted under this
chapter, the commissioner may make, amend, and rescind rules,
forms, and orders necessary to carry out this chapter.
(b) Unless specifically provided in this chapter, a rule, a form, or
an order may not be adopted, amended, or rescinded unless the
commissioner finds that the action is:
(1) necessary or appropriate for the public interest or for the
protection of investors; and
(2) consistent with the purposes fairly intended by the policy
and provisions of this chapter.
(c) All rules and forms of the commissioner must be published.
(d) A provision of this chapter imposing any liability does not
apply to an act that is:
(1) committed or omitted in good faith; and
(2) in conformity with a rule, an order, or a form adopted or
issued by the commissioner;
even if the rule, order, or form is later amended, rescinded, or is
determined to be invalid for any reason by judicial authority or other
authority.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-37
Service of process
Sec. 37. (a) If a person, including a person that is not a resident of
Indiana, engages in conduct prohibited or made actionable by this
chapter or any rule or order adopted or issued by the commissioner,
the commissioner shall be considered the person's attorney for the
purpose of receiving service of any lawful process in a noncriminal
proceeding that is:
(1) brought against the person, a successor of the person, or a
personal representative of the person;
(2) related to the prohibited or actionable conduct; and
(3) brought under this chapter or any rule or order issued or
adopted by the commissioner.
(b) Process served on the commissioner under subsection (a) has
the same force and validity as personal service on the person
engaging in the prohibited or actionable conduct.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-38
Application of sections IC 23-2-6-17, IC 23-2-6-23, and
IC 23-2-6-24
Sec. 38. (a) Sections 17, 23, and 24 of this chapter apply to a
person who sells or offers to sell if:
(1) the offer to sell is made in Indiana; or
(2) an offer to buy is made and accepted in Indiana.
(b) Sections 17, 23, and 24 of this chapter apply to a person who
buys or offers to buy if:
(1) the offer to buy is made in Indiana; or
(2) an offer to sell is made and accepted in Indiana.
(c) For purposes of this section:
(1) an offer to sell or an offer to buy is made in Indiana,
whether or not any party is present in Indiana, if the offer:
(A) originates from Indiana; or
(B) is directed by the offeror to Indiana and is received at:
(i) the place to which the offer is directed; or
(ii) any post office in Indiana, in the case of a mailed offer;
and
(2) an offer to sell or to buy is accepted in Indiana if the
acceptance:
(A) is communicated to the offeror in Indiana; and
(B) has not previously been communicated to the offeror,
orally or in writing, outside Indiana.
(d) For purposes of this section, acceptance is communicated to
an offeror in Indiana, whether or not any party is then present in
Indiana, if:
(1) the offeree:
(A) directs the acceptance to the offeror in Indiana; and
(B) reasonably believes that the offeror is present in Indiana;
and
(2) the acceptance is received at:
(A) the place to which the acceptance is directed; or
(B) any post office in Indiana, in the case of a mailed
acceptance.
(e) For purposes of this section, an offer to sell or to buy is not
made in Indiana if:
(1) a publisher circulates in Indiana, or there is circulated in
Indiana on the behalf of the publisher, a newspaper or other
publication of general, regular, and paid circulation that:
(A) is not published in Indiana; or
(B) is published in Indiana, but has had more than two-thirds
(2/3) of the newspaper's circulation outside Indiana during
the past twelve (12) months; or
(2) a newspaper or a radio or television program originating
outside Indiana is received in Indiana.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-39
Administrative proceedings
Sec. 39. (a) The commissioner shall initiate an administrative
proceeding under this chapter by entering a notice of intent to take
a specific act or by entering a summary order. The notice of intent or
summary order:
(1) may be entered without notice;
(2) may be entered without opportunity for a hearing;
(3) is not required to be supported by findings of fact or
conclusions of law; and
(4) must be in writing.
(b) After entering a notice of intent or summary order, the
commissioner shall promptly notify all interested parties that the
notice of intent or summary order has been entered and of the
reasons for the entry.
(c) If a proceeding is under a notice of intent, the commissioner
shall inform all interested parties of the date, time, and place set for
the hearing on the notice.
(d) If the proceeding is under a summary order, the commissioner
shall inform all interested parties that:
(1) the parties have thirty (30) business days from the entry of
the order to file with the commissioner a written request for a
hearing on the matter; and
(2) a hearing will be scheduled to begin not later than thirty (30)
business days after the receipt of a written request.
(e) If the proceeding is under a summary order, the commissioner
may, by the commissioner's own motion, set a hearing for the
proceeding, whether or not a written request for a hearing is received
from an interested party.
As added by P.L.177-1991, SEC.10.
IC 23-2-6-40
Summary orders; final orders
Sec. 40. (a) A summary order becomes a final order if:
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